You’re Married. You’re Not on the House Title. What Are Your Rights?

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If your house is titled in your spouse’s name, what are your rights in the home? The answer depends on several factors, starting with the law and customs of your home state. Let’s take a look.

In Community Property States

In a community property state — let’s say California — your ownership rights are automatic for a house acquired during your marriage. Your home is equally shared between you, fifty-fifty — no matter how it’s titled. You can change this only by giving up your rights in the home. And in California, that would mean you’ve completed a quitclaim and preliminary change of ownership form, and then had these documents filed and recorded with the county.

The policy driving community property is to keep spouses from losing their homes when marriages break down. The assumption here is that both spouses will have put money, maintenance or care into the home during the course of the marriage, so it would be unfair to throw one spouse out with no equity. Other community property states, which have rules similar to those in California, are Arizona, Nevada, New Mexico, Texas, Louisiana, Idaho, Washington, and Wisconsin.

What about a home owned by one of you before you became a couple? Or, what if property was given or bequeathed to just one of you? That constitutes separate property. The other spouse has neither rights nor duties to pay unpaid debts and liens on the property.

Spouses can change separate property to community property by transferring the title into joint ownership. How does that impact the person who formerly owned the property alone? When property is titled solely in your name, you alone can sell it or refinance it. By bringing a co-owner onto the deed, you relinquish a part of that control. Both owners will have protected rights after both sign an agreement for a legally binding “transmutation” of the home from separate to community property, following state-specific rules.

Read more about transmuting separate property, and the tax advantages of community property.

What About Other States?

What about states where community property isn’t the norm? In some of these other states, spouses may use special trusts to affirmatively designate community property. South Dakotans may use spousal trusts for this, as may Alaskans. The Tennessee community property trust allows community property designation for a home, along with tax advantages. There may be other options too. A lawyer in your state experienced in wills, estates, and real estate matters can advise you.

But generally, if you live in a common-law state — that is, if you are not in a community property state — you need to get your name on the title to have ownership rights. Under the common-law system of real property, a house acquired by one life partner belongs solely to that individual, unless titled jointly.

Why isn’t your home titled jointly? Maybe your spouse or life partner bought the house before you became a couple and wanted to retain it as separate property, or to bequeath it to a child from a previous marriage. Maybe a tax or estate planning adviser suggested that your partner take title as a sole owner. Or maybe your credit score was an issue at the time of purchase.

For a spouse to be added onto the mortgage after earning an improved credit score, the couple must refinance their home. If the lender extends the loan to both of you, based on your combined financial profiles, both of your names will almost certainly have to be on the title. In other words, lenders ask two co-borrowers to be co-owners, not just co-signers. The reason is simple. Lenders want both people on the title so that both are legally obliged to send in the monthly payments. If those payments stop coming, lenders don’t want to go through the trouble of pressing a non-owning co-signer to step up.

You’ll Get the Home in Your Partner’s Will. Is That Enough?

If you’re named in the will, and your partner does predecease you, it could be all you need. But probate carries a risk in some families. You could be pitted against your spouse’s or life partner’s family over rights to keep the home. If your partner must maintain sole ownership while living, find out if you can be a named beneficiary on a transfer on death deed. If your state offer this, it’s a good alternative to probate, yet it still offers a stepped-up cost basis, so a beneficiary who decides to sell can avoid heavy capital gains taxes on a valuable house.

With either option, though, as long as you and your life partner are living, you will have no legal say. Your partner could sell, take a loan out on the property, or refinance without your input or involvement.

Moreover, if you live in the home but aren’t involved in the mortgage, it’s possible that the home you live in could go into foreclosure. These are key reasons for having the title transferred into both of your names as a joint tenants with survivorship rights, or, where permitted, as a tenants by the entirety (which protects each spouse from being liable for the debts of the other). Then you will both have a vested interest. Should your spouse pass away first, as the survivor you’ll receive the house. You’ll do this by recording an affidavit of survivorship along with the late spouse’s death certificate.  

Pro tip: Does your state allow sole homeowners to switch their titles to co-ownerships upon marriage? Some do. If your spouse creates co-ownership and rights of survivorship for you, be sure what’s transferred is a 100% interest into both names, not just a half-interest.

What Is the Process for Changing a House Title?

Often, the easiest way to change a title from a sole ownership into a joint ownership is quitclaiming (for Californians, using an interspousal grant deed), and naming both partners on the new deed as co-owners.

Some couples go to the company that handled the current owner’s settlement. Its agents have experience in working with couples who change their titles from sole ownership to co-ownership. It is a straightforward matter to have both people sign the deed with the notary, and pay the filing fee.

But it is best to meet with local wills and estates or real estate lawyer to understand the options in your state, and the risks and benefits of each, before adding a spouse’s name to the title.

A few reminders for title changes:

  • Understand if state transfer taxes apply in your situation. Don’t forget to check whether the title change will leave your homestead exemption or other tax exemptions intact, or if you’ll need to reapply for them.
  • Call the mortgage specialist before taking action, to avoid triggering a “due on transfer” clause that could mean the mortgage is payable at once.
  • Be sure co-owners are named beneficiaries on the homeowners’ insurance policy.

If you are a same-sex co-owner, note: Since 2015, when the U.S. Supreme Court decided Obergefell v. Hodgessame-sex couples have an additional option. You can still vest your home title jointly as tenants in common or joint tenants with survivorship rights. But now, if you marry, an additional option exists: co-owning your house as tenants by the entirety, which insulates each of your ownership interests from the other’s creditors.

How a Divorce Changes Homeownership

The terms of a court divorce settlement will sever the joint ownership and directs the future titling of a home. If children are involved, preserving the children’s best interests will be the court’s focus.

The co-owner leaving the house may file a quitclaim or a deed without warranty to allow vesting to shift to the one who stays. Both people must sign the deed — and the departing partner should quitclaim the entire interest, not just a half interest. Note that a partner who leaves might still granted equity in the home, through a divorce lien.

The spouse who signed the mortgage is responsible for paying it off. Be sure you understand who is obliged to make payments, and how. Remember, if payments stop, then the bank can foreclose on the home.

Summary: Making Informed Changes

As you can see, a homeowner can easily use a quitclaim to add a spouse or partner to the house title. Yet additional factors can inform the best way to make this change, and many of these factors involve your state’s particular blend of laws.

At Deeds.com we cannot supply legal advice, which is case-specific and requires a consultation with a lawyer in your state. Yet we offer this overview as a starting point in understanding the general rules, and what you can do to fortify your legal and financial well-being.

Photo credit: Becca Tapert, via Unsplash.